I'm only level 2 and see I'm getting alot of plain swords and other things without mods. It's not allowing me to put these in the marketplace so is it safe to assume these are worthless and I should throw them in trash?

yep...

You could find items with decent value starting around level 10. Here's a chart so you can see the "max" stats to get an idea what may or may not be useful.

http://i38.tinypic.com/2rzp4b5.jpg

Those items you cant put onto the marketplace are white items
you can throw these into the well of evil, if you win against that monster,you willget the item you put in, with atleast a rare prefix (2 mods) , or maybe higher if your lucky
also its possible to get multiple items to drop doing this (just like any other mob)

but for valuable stuff id go by mwm's post.
but remember, itll take awhile to find anything really good unless your lucky.
took me 10- 15 climbs to 71 before i found my first decent item


anyway, feel free to pm me if you have any more questions